R. SETHURAMAN vs Manager, Indian Overseas Bank

THIS is a complaint under Section 17 read with Section 12 of the Consumer Protection Act.

THE complainant who is a manufacturer of Medicines. THE complainant was having various loan facilities with the first opposite party such as open cash credit; Term Loans and Funded Loans and supply bills. THE complainant had deposited several documents of title in respect of his properties. THE complainant''s unit became sick with effect from 1.4.1986. THE opposite party promised to render financial assistance for rehabilitation, but failed to do so. THE complainant sold 1 acre of land to the L.I.C. of India for Rs. 9,00,000/- and amount was paid by the L.I.C. directly to the opposite party No. 1 in discharging all the debts due from the complainant. As per the statement of account furnished by the first opposite party, the total amount due to it comes to Rs. 8,70,854.05. But according to the complainant, the amount comes to Rs. 8,82,410.27 as per the report of his Chartered Accountant. THE complainant is liable to pay only simple interest of 14% p.a. from 1.4.86. It is the case of the complainant that the sale proceeds of the land sold by him to the L.I.C. of India completely wiped out all the debts and no further amount was due to the first opposite party. THE first opposite party however refused to return the documents. THE first opposite party also stopped to pay from March 1992. THE complainant approached the other banks for financial assistance and he was asked to obtain a no objection certificate from the first opposite party. THE first opposite party issued a certificate containing flase recitals and hence other banks did not offer loan to him. Hence this complaint claiming compensation in the sum of Rs. 37,500/- for excess interest paid by the complainant and Rs. 1,25,000/- towards loss of profits suffered by the complainant on account of non-return of documents. The claim is resisted by the opposite party. According to the opposite party, the amount outstanding and due from the complainant as on 3.2.92 is Rs. 14,45,738/-. The first opposite party gave permission to the complainant to sell one of the items to L.I.C. of India and the assurance that the sales proceeds paid to it. Accordingly a sum of Rs. 9,00,000/- was received from the L.I.C. of India. There was still a balance of Rs. 4,63,641/- in respect of the open cash credit account, Rs. 21,706/- in respect of Term Loan 1/84 and Rs. 60,391/- in respect of Term Loan 4/85 in all aggregating to a sum of Rs. 5,45,738/- as on 14.2.92. As on 31.1.91, the amount comes to Rs. 7,08,561/-. The claim of the complainant that no further amount due is untenable. The complainant cannot also claim that he is liable to pay simple interest at 14%. There is no question of returning the documents when such amounts are due still. The opposite party do not admit that the complainant''s firm became sick. The account submitted by the complainant''s Auditor is not acceptable. The calculation made by him is incorrect. It is denied that this first opposite party his issued a no objection certificate containing false recitals. The complainant was enjoying various credit facilities and these facilities were not stopped. The certificated issued is a true one. There is no deficiency of service and negligence on the part of the opposite parties.

Exh. Al to A4 and B1 to B5 are marked by consent. Proof affidavits are filed. No oral evidence has been let in.

THE complainant has come forward with two claims - one for compensation of Rs. 37,500/- for excess interest paid by the complainant and another for compensation of Rs. 1,25,000/- for loss of profit suffered by the complainant on account of non-return of documents. The complainant has been having several credit facilities with the opposite party on deposit of security title deeds. In order to discharge his debts to the first opposite party, the complainant has sold one item of the property with the permission of the first opposite party to the L.I.C. of India and paid the entire sale consideration of Rs. 9,00,000/- According to the complainant by payment of this sum of Rs. 9,00,000/- all the debts due to the first opposite party are discharged. He relies upon a statement of account prepared by an Auditor by name Senthil Kumar engaged by the complainant for the purpose. The complainant contended that he is liable to pay interest only at 14% and the excess amount of interest claimed by the first opposite party to the tune of Rs. 37,500/- is payable to him.

ACCORDING to the opposite party, the total sum due from the complainant came to Rs. 14,45,738/- towards which a sum of Rs. 9,00,000/- has been received from the L.I.C. of India which was purchased one item of property from the complainant. Adding subsequent interest, the aggregate sum due to the first opposite party is Rs. 7,08,561/-. The claim of the complainant that he is liable to pay at 14% interest is rejected. Hence the question whether all the debts due to the first opposite party are wiped out and whether the opposite party has claimed excess interest of Rs. 37,500/- as claimed by the complainant are matter which should be decided only by taking account. The Forum constituted under the Consumer Protection Act is not the proper Forum for taking accounts and deciding the account due to any of the parties that is to be done only by the regular Civil Court of competent jurisdiction. We are therefore unable to hold that the complainant is entitled to refund of Rs. 37,500/- as excess interest collected from him. The next claim of the complainant is that all the debts are wiped out and the first opposite party, illegally with-held the documents. As already pointed out the contention of the opposite party is that there is still a balance sum of Rs. 7,08,561/- due as on 31.3.91. This is a matter which has to be settled after taking accounts and this relief could be granted only by the Regular Civil Court. The claim therefore that the complainant suffered loss of profit on account of the denial of return the documents is unsustainable. It is argued that the complainant wanted to obtain loan facilities from another Bank namely the State Bank of India, Trichi and Canara Bank, Anna Nagar, Madras and they wanted to get a No Objection Certificate from the first opposite party. Exh.A5 is the No Objection Certificate issued by the first opposite party which runs thus : "The captioned party is enjoying various credit facilities like supply bills, open cash credit and Term loans with us. Now the party wants to avail credit facilities from your Bank." "Under these circumstances we have no objection to avail loan facilities by the captioned party from you." It is the contention of the complainant that as this certificate has stated that the complainant is enjoying various credit facilities, the State Bank of India has refused to advance loans to the complainant and this statement that the complainant is enjoying various facilities is false as all transactions have been stopped by March 1992. The contention of the opposite party is that it never stopped transaction with the complainant and no such intimation was given to the complainant orally or in writing and hence the statement in the certificate that the complainant is enjoying various facilities is true. There is absolutely no evidence to show that the first opposite party has stopped the transactions with the complainant from March 1992 or closed the complainant''s accounts. The certificate issued by the first opposite party cannot therefore be said to be erroneous. The refusal of the State Bank of India to finance loans to the complainant may be due to several reasons and it cannot be said that the State Bank of India refused the loan only because of Exh. A5 certificate issued by the first opposite party. We are unable to find any deficiency or negligence on this point also.

IN the result, the complaint fails and is dismissed, but without costs. Complaint dismissed.